Clarke’s trial balance shows the income tax provision for the year ended 31 December 2015 is $11,500. The difference between the carrying amounts of the net assets of Clarke (including the revaluation of the land in note (below) and their (lower) tax base at 31 December 2015 is $28,500. The opening balance on the deferred tax account was $3,200 and the Clarke’s rate of income tax is 25%. Clarke bought a land for $68,000 on 1 January 2015. On 31 December 2015, Clarke decided to revalue its land to $72,500. Prepare the extracts of the three financial statements for the year ended 31 December 2015, to show the effect of the above transactions. (Also show the calculation of deferred tax)

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Financial Statements for the year ended Dec31 2015 Provision for Tax... View the full answer